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5 ways to start a company, (without quitting your dayjob) - Bisnis
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Almost everyone stuck in a cubicle dreams of starting his own business. Here are 5 ways to use your current gig to launch a new venture.
If you're reading this, there's a good chance that you've always wanted to launch your own startup. According to our research, roughly half of all Business 2.0 readers dream of founding their own companies.
Odds are, however, that you're still working for someone else. Maybe it's because you're afraid to give up that steady paycheck. Perhaps you're simply terrified by the thought of placing yourself at the mercy of greedy investors, cutthroat competitors, and a potentially indifferent marketplace. Whatever the reason, it's clear that there's a lot of unrequited entrepreneurial longing out there.
What if cubicle-bound employees could use their current gigs to launch new ventures? Of course, starting a company while employed by another one can be tricky -- especially if you've signed agreements promising not to compete with your employer or not to hire away colleagues. Indeed, in many cases anything you invent while collecting a paycheck can be considered the boss's property. James Geshwiler, managing director of CommonAngels, a Boston investment group, warns that from a legal perspective, cubicle entrepreneurs often "tread on very sensitive ground."
Still, working for a corporation affords access to several things that are vital to a fledgling company: money, customers, market research, personnel. And it turns out that many former wage earners have successfully exploited these resources -- legally, and in some cases with the assistance of their employers -- to realize their entrepreneurial dreams. Some actually built their startups while working for someone else, while others simply tapped previous employers' people and cachet.
All of them, however, learned to look at salaried life as a springboard rather than a prison. Daniel Curran, a management consultant who lectures on entrepreneurship at UCLA, suggests, "When you come across hidden customer demands in your job, turn them into a business."
Here are five ways to get started.
1. Use Your Salary as Funding
Gregory Moore financed his big idea one paycheck at a time.
The opportunity was obvious: Gregory Moore wanted to create a company that would securely transmit patient and payment data between hospitals, doctors, clinics, and insurers. In 2000 he took the proposal to software maker TeraHealth, which then hired him to make it a reality. But TeraHealth didn't pursue the effort, so Moore began building the business on the side. He used his salary to hire a coder and spent nights and weekends filing incorporation papers and creating sales brochures. He even set up a basic office.
The Monday after he left TeraHealth in March 2001, his new company, Harbor Healthcare, was open for business. Moore booked his first revenue about a month later. TeraHealth grumbled, but Moore had records proving that he'd hatched his idea long before he joined the company.
The key, he says, is "to use your salary to invest in the startup as much as possible before jumping ship." After five years and several rounds of angel funding, he still owns a majority of the firm's equity.
2. Turn Common Complaints Into a Business Plan
Jeff Gallino and Cliff LaCoursiere decided to give customers what they really wanted.
You know that feature your customers are always asking for? If your employer won't deliver it, maybe you should.
That's what Jeff Gallino and Cliff LaCoursiere did. Back in 2001 the two worked for ThinkEngine Networks, a Boston-based telecom equipment company. Gallino handled relationships with software partners, while LaCoursiere ran sales. The two kept hearing customers ask for a way to digitally sift through recorded calls and analyze them.
Gallino and LaCoursiere brought the idea to their employer, but they received a halfhearted response. So the duo wrote a business plan during off-duty hours and left ThinkEngine Networks in 2002. They funded their new firm, CallMiner, for a year with money saved from their salaries.
Gallino wrote the first version of their software, which builds an overall picture of what's being said through speech recognition, pattern mining, and signal analysis. The product attracted angel investment and a venture round, including cash from In-Q-Tel, the CIA's venture fund. Today, CallMiner's applications are used by airline, energy, and cable companies to categorize call-center calls, while government agencies are evaluating the technology's ability to automate intelligence gathering.
3. Make Your Boss a Beta Tester
David Bookspan invented a new service that his old firm just couldn't live without.
While working as a partner in a Philadelphia law firm during the 1990s, David Bookspan figured out how to use the local courthouse's lawsuit filings to drum up new business. Bookspan realized that if he could automate his system, he'd be able to create a lead-generation service that other lawyers would gladly pay to access.
The chairman at his firm felt the effort would distract from its core legal practice, but he let Bookspan develop it on his own. "Just be completely up front," Bookspan advises anyone with similar intentions. "View your employer as your friend."
He incorporated as MarketSpan in 1996 and stayed at the law firm for another year, working nights out of his home with a partner who was a software developer to create a marketable product. Four years later, with 88 of the nation's top 100 law firms (including his old employer) signed up as customers, his company was acquired by CourtLink (itself later bought by LexisNexis) for a reported $35 million.
4. Take Advantage of Your Company's Reputation
Dan Connors turned his pedigree into seed capital.
After 11 years at LucasArts, the videogame arm of Lucasfilm, Dan Connors decided that enough was enough. Hoping to make games that emphasized episodic storytelling rather than shoot-'em-up action, Connors was heartbroken when LucasArts killed his cartoon-based project to put more resources behind the firm's Star Wars franchise. At the same time, LucasArts was downsizing, so it was easy to quit.
Connors started out with one like-minded colleague in April 2004. They called their new venture Telltale and seeded it with cash from their severance packages. Then, over the next two years, as other former colleagues left LucasArts, Connors hired 15 of them.
Thanks to their LucasArts halo, Telltale had no problem finding clients. Within nine months it landed a deal to work with Ubisoft on a game based on TV's CSI. LucasArts's reputation also made it easier to raise $1.4 million in angel funding. Says Connors, "It's hard to overestimate the door-opening power of the LucasArts name."
5. Convert Your Employer Into a Business Partner
Jeff Hilbert spun a doomed division into a successful startup.
In 2002, when Jeff Hilbert was managing the design services division of Coventor, a chip-design software company in North Carolina, his unit was slated for the chopping block. However, Hilbert noticed that he had recently been winning a lot of business from wireless chip companies, so he asked Coventor to let him spin off the unit as a stand-alone company.
The board went for it and gave the startup -- now called WiSpry -- $6 million worth of patents and other intellectual property, seven employees, several hundred thousand dollars, and an office in Irvine, Calif., all in exchange for shares in the company. Today, Hilbert is CEO of WiSpry, which is developing a special chip for cell phones that could improve battery life by 20 to 40 percent. His advice: Don't rely too much on a parent company. Sooner or later, all startups must be able to fend for themselves.
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